“Nuclear” families may have been the norm in the past, but now there are more “blended” families in Australia and around the world than ever before. But what does that mean for your estate planning if you have stepchildren?

The Inheritance (Family and Dependants Provision) Amendment Act 2011 (WA) (2011 Amending Act) amended by the Inheritance (Family and Dependants Provisions) Amendment Act 2012 (WA) (2012 Amending Act) amended the Family Provision Act 1972 (the Act) to allow a stepchild to make an application for provision out of a deceased step-parent’s estate in certain circumstances. Before these amendments, Western Australia was the only State that didn’t allow stepchildren to make such a claim.

Under the Act, a stepchild means a person who was alive on the date on which the deceased step-parent married or entered into a de facto relationship with a parent of the person making the claim but who is not a child of the deceased.

Under the Act, there are only two circumstances where a stepchild is eligible to make a family provision claim. Those circumstances are:

  1. where the stepchild was being maintained wholly or partly or was entitled to be maintained wholly or partly by the deceased step-parent immediately before the step-parent’s death; or
  1. where the deceased step-parent had received or was entitled to receive property with a value greater than the prescribed amount from the estate of the parent of the child.  The current prescribed amount is $517,000.[1]

A claim under the first scenario seems pretty straightforward and relatively easy to prove as, ordinarily, it would apply to young children living with the step-parent at the date of death. The key here is dependence.

An example applicable to the second scenario is where a child’s natural parent passes away leaving his or her whole estate under the Will to the step-parent. Subsequently, the step-parent leaves his or her whole estate to his or her own biological children. In this case, the stepchild may have had an expectation that, upon the death of the step-parent, that the stepchild would have received a portion of the step-parent’s augmented estate.

Under the second scenario, it is not a prerequisite that the stepchild be dependent upon the step-parent. In fact, it is common for a step-parent and stepchild to become distant from each other. Although there have been no decided cases in WA as yet, looking at cases from the other States suggests that once a claim has been made a stepchild will need to demonstrate a greater need in circumstances where:

  • the relationship between the stepchild and stepparent is distant or has suffered a period of estrangement; and
  • the extent to which the stepparent’s estate reflects the stepparent’s own contributions and efforts as opposed to the efforts and contributions of the stepchild’s natural parent.

In contrast though, a stepchild may not need to demonstrate a great need where:

  • the relationship between the stepchild and stepparent is close and akin to parent and child; and
  • it can be shown that the stepparent’s estate is sourced substantially from the stepchild’s natural parent.

If you would like further information about making a family provision claim, please contact Rob Durey or Kimi Shah on 08 6166 9000 or by email rob@ryandurey.com and kimi@ryandurey.com.

[1] FAMILY PROVISION REGULATIONS 2013 – REG 3 – Minimum value of property deceased derives from stepchild’s parent for stepchild to make claim. The amount prescribed for the purposes of section 7(1)(eb) of the Act is $517 000.

 

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